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namely investment rates 54
(in physical capital) are considered paramount, then the
best parallel performance must be offered by the World Bank's "More Developed
Mediterranean" group of économies. A single Cypriot economy could have
experienced an increasing economic rôle of government, like the average Micro
Economy, in the 1964-80 period, or a shrinking rôle of government like the average
Regional Sub-Group economy; either way, growth would be likely to have been
affected. Given the fact that each possible peer group out performs the others in
some correlating experiences with Cyprus until 1964 (Tables 6.3), or offers policy
alternatives in the 1964-80 period, each peer group's mean economic performance
offers a range of potential possibilities for a single Cypriot economy, a range of
benchmarks for a unified, integrated Cypriot economy in 1980.
There are three reasons why the earlier bench-marking stopped in 1980. The first is
that simply extrapolating from past performance does not allow a statistically and /
or historically relevant resuit to be extended beyond a very few years. Another
reason is because 1980 offers a useful cut-off point between recovery from the
effects of war, de facto territorial shifts and separate economic development. 1980 55
appears to be the point at which both économies have recovered from their
respective politicai traumas, so presumably any costs of division can be determined
then. Another reason to end bench-marking in 1980, is because the proxy for allisland
economic development being developed here, the performance of peer
économies, appears to offer a less convincing benchmark at the mean after 1980. A
significantly wider and widening divergence in economic performance occurs
amongst the peers after 1980, in ail three groups (variable 5, Table 6.5); this tallies
with the performance of developing countries more generally 56 . However, the
proposition that without war Cyprus should have done no worse by 1990 than the
lowest average peer group performance, remains temptingly available as a tool to
determine something of the cost of division.
54 ibid.
55 In 1980 Turkish Cypriot exports peaked as a % of GDP, Source: "TRNC", "State" Planning
Organisation. Unpublished National Accounts Statistics. (Under Secretary Ahmet Zeki Bulunc,
1993).
56 Little, Cooper, Corden, & Rajapatirana 1993. op. cit.
332